The bustling streets of downtown Shanghai echo with the vibrant competition among bubble tea aficionados, where ChaPanda’s 8,000 domestic stores stand in close proximity to rival tea specialist Heytea, each vying for the attention of customers. This fervent market illustrates the ubiquitous appeal of flavored milk tea beverages, particularly among teenagers and young professionals, who indulge in the drink every few days.
Best known for its Taiwanese origins in the 1980s, featuring tapioca balls or “bubbles,” flavored milk tea has transcended borders to become a global phenomenon. Buoyed by a recent surge in domestic popularity, mainland Chinese companies are now poised to capitalize on overseas markets, aiming to raise funds and expand their footprint beyond China.
Wang Hongxue, an executive director at ChaPanda, emphasized the “huge potential” of overseas markets during a press conference in Hong Kong, preceding the company’s listing in the territory, aiming to raise approximately $330 million. With sights set on Southeast Asia and further domestic growth, ChaPanda opened its first store in South Korea in 2023, while Heytea made its debut in New York in December.
Other major players in the Chinese bubble tea market, including Mixue and Guming, are also gearing up for initial public offerings in Hong Kong, leveraging the territory’s conducive environment for directing proceeds outside of mainland China. Mixue, for instance, opened its first international store in Hanoi in 2018 and now boasts over 3,000 stores outside of China, while Guming plans to “continually evaluate opportunities to enter overseas markets.”
Building on their domestic success, these companies are tapping into a burgeoning market within mainland China, where freshly made tea beverages have witnessed exponential growth. The China Chain Store & Franchise Association reported that the market size for freshly made tea beverages nearly doubled from Rmb534 billion in 2018 to Rmb1.04 trillion in 2022, with further growth projected in the coming years.
Despite economic headwinds and consumer belt-tightening, products like bubble tea remain resilient, offering affordable indulgences for consumers seeking moments of comfort amidst economic uncertainties. With a diverse range of offerings and a strategic focus on innovation, Chinese milk tea brands are poised to make a splash in the global beverage market, redefining the landscape of tea culture beyond China’s borders.
